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Massachusetts health care — wonky, with a healthy dose of reality

DOI Sets Small Business Insurance Premium Hearings; Releases Premium Data (UPDATED)

DOI Sets Small Business Insurance Premium Hearings; Releases Premium Data (UPDATED)

October 28, 2009

As the Governor called for last week, the Division of Insurance has announced an ambitious schedule of hearings to look into rising small business health insurance premium rates.

The DOI announcement explains that the hearings will be in two stages. The first stage will consist of 5 "introductory informational" public hearings, Monday through Friday of next week. The hearings will be held in Lowell, Springfield, Boston, Bridgewater and Worcester.

The purpose of the public hearings is to gather comments regarding questions DOI should consider in advance of the main event, dubbed the "Health Plan Hearings."

The second stage of the hearings start on November 9. According to the notice, "Massachusetts health plans will be asked to respond to questions posed by the Division regarding health premiums they charge to small businesses. It is anticipated that these Health Plan Hearings will take place three days per week for a period of at least six weeks." That's S - I - X weeks.

Also posted on the DOI website is an analysis of premium increases for both small and large group plans for each carrier between April 2008 and April 2009. The document begins to answer a key concern of small businesses - that they pay much more than large businesses for the same coverage. The link on the state site is incorrect (in our Firefox browser; it works fine in IE), however, but we figured out the typo and you can read the document here (pdf).

The comparisons show some real differences between the plans. One must look at the data to get the full understanding. For example, for Blue Cross, small group premiums in their less expensive plan increased 14%, while large group premiums for the same plan went up around 10%. This Blue Cross small business plan now costs 9% more than the large business equivalent. In contrast, the cheapest Harvard Pilgrim small group plan went up by 9.2%, while the equivalent large group plan increased 11.9%. For this Harvard Pilgrim plan, small groups pay just 2.9% more than large groups.

For some carriers, however, the comparisons are not between identical plans. One would have to know the differences in benefits to better understand the price differential.

We applaud the Governor and DOI for bringing some transparency and accountability to the insurance premium process. We have long called for a public process that opens up the insurance market. While auto insurance rates have long been considered in the public domain, health insurance has been shrouded for too long. We look forward to the hearings.
- Brian Rosman

UPDATE: DOI also announced yesterday special sessions to look at group purchasing cooperatives for health insurance. These sessions will be held on five Tuesday afternoons, starting November 10. The sessions are as follows:

November 10: general discussion of small group laws
November 17: Group purchasing coops - guaranteed issue, product design and rating rules
December 1: health promotion programs
December 8: consumer protections
December 15: other concerns